Malawi's first EITI Report covers oil, gas and mining sectors as well as the forestry sector for the period from 1 July 2014 and 30 June 2015 (2014/15 FY). It was published in April 2017.
The country is a small producer of uranium, gemstones, coal and construction materials, although the government is promoting investment in the extractive industries to reach 20% of GDP in 2020. Some have expressed concerns about the sector’s environmental impact, distribution of benefits and license awards, particularly related to the oil exploration around Lake Malawi. Malawi is implementing the EITI to build trust amongst stakeholders in the mining, oil and gas sectors.
Malawi published its first EITI report in April 2017 covering the oil, gas, mining and forestry sectors.
The Ministry of Natural Resources, Energy and Mining (MNREM) is the Government Entity responsible for the administration of the minerals sector, including granting mining licences. It has statutory oversight of the energy, minerals, and forestry sectors. The minerals sector is regulated by the Mines and Minerals Act (1981) whiles the upstream oil and gas sector is regulated by the Petroleum Exploration and Production Act (1983) (PEPA). Plans are underway to review the legal instruments governing the extractive sector. Due to the importance of artisanal and small-scale mining, MNREM has drafted an Artisanal and Small Scale Mining Policy in an effort to stimulate and guide ASM operations by administering, regulating and facilitating the growth of the sub-sector through a well-organised and efficient institutional framework.
The main taxes and fees imposed on companies operating in the mining sector include Corporate tax, Dividends Tax, Royalties and Fees. The Malawi Revenue Authority (MRA) is the main body responsible for collecting and managing taxes paid to the central government.
Oil and mining contracts are public and are available online.
Mining licenses are awarded on a ‘first come first served’ basis, while oil and gas licenses have been awarded through restricted competitive tenders. Malawi has a public mining cadastre available online.
Objectives of beneficial ownership transparency in Malawi
- Increasing the contribution of the mining sector to Gross Domestic Product (GDP) from less than 1% to 20% by 2025;
- Promoting good governance and accountability in the extractive sector;
- Deterring corruption in the allocation of extractive rights;
- Preventing abuse of Malawi’s taxation system;
- Support of efforts to address money laundering and other financial crimes in the economy;
- Promoting Malawian citizens’ participation in the monitoring of extractive activities, including local content provisions and;
- Promoting citizens getting the full economic benefit of the nation’s natural resources, especially in communities where extraction is taking place.
Progress on implementing beneficial ownership disclosure
As there is currently no petroleum production in Malawi, most of the companies which will be required to disclose their beneficial owners are those with exploration licenses, in particular in the mining sector. According to Malawi’s scoping study from February 2016, government agencies involved in the EITI process see no legal obstacles to beneficial ownership disclosure. Companies applying for mineral rights must provide information on beneficial ownership to the Department of Mines, although further efforts will be necessary to allow for this information to be included in Malawi's first EITI Report.
Malawi EITI plans to organise conferences to domesticate the definition of beneficial ownership and organise a series of workshops to build capacities of relevant institutions to champion and facilitate implementation of beneficial ownership disclosure. Read Malawi's beneficial ownership roadmap below for more information.
Government will ensure that in the future, mining contracts are properly negotiated to maximise benefits for the country. In this regard, Government will establish an independent contract negotiating unit in extractive resources.
Malawi is a small producer of uranium, rock aggregate, bituminous coal, gemstones, limestone and a range of construction materials. The country is also promoting oil and gas exploration, particularly around the Lake Malawi region. In the latest 2014/15 Malawi-EITI Report, rock aggregates accounted for more than half (56%) of production, followed by coal (25%).
Malawi has deposits of uranium, coal, limestone, bauxite and rare earths.
|Uranium||11,337||metric tons||U3O8 content, from total reserves of 10.46 million tons of ore.|
|Coal, bituminious||21.4||million metric tons|
|Limestone||25||million metric tons|
|Bauxite||28.8||million metric tons||With average grade of 43.9% AL2O3|
|Beach dune sand||700||million metric tons||With an average grade of 5.6% total heavy mineral sands (ilmenite, zircon, rutile, monazite and garnet)|
|Rare earths||2.5||million metric tons||With 4.2% rare earths content and substantial inferred resources.|
According to the MEITI 2014/15 report, total revenue for the extractive sector was MWK 5,935 million (equivalent to USD 13.6 million) of which 49% came from forestry, 40% from solid minerals, and 11% from oil and gas. These revenues were mainly collected through royalty tax, resource rent tax and corporate income tax and log sales.
The EITI encourages multi-stakeholder groups to explore innovative approaches to make the EITI more relevant and useful.
- The first EITI Report provides information about the legal/fiscal framework, revenues and contribution of the forestry sector to the economy.
- EITI Malawi intends on producing a checklist for agencies awarding licences and contracts to ensure due diligence of investors is performed.
Malawi EITI aims to be a key part of Malawi’s reforms to increase transparency and accountability in the natural resource sector. The work plan includes strategic goals like building trust between stakeholders and strengthening partnerships. Malawi EITI has published the first EITI Report which covers the fiscal year 1 July 2014 to 30 June 2015 and a three-year roadmap for beneficial ownership disclosure.
The government announced its intention to implement the EITI in a Presidential address to the 45th session of Parliament on 17 June 2014, although this commitment was already included in the government’s March 2013 Mines and Minerals Policy. Malawi had undertaken previous preparatory work, as outlined in the (then) Ministry of Finance and Development Cooperation’s October 2011 overview of work done in Malawi’s EITI debate. The ToR of the multi-stakeholder group, chaired by HE Goodall Goondwe, Minister of Finance, Economic Planning and Development, gives four seats each to the three stakeholder groups (with alternates). Members are appointed for three years renewable.
This is the Malawi EITI 2015 Annual Progress Report (in accordance with Requirements 7.4 and 8.4).
This is the Malawi EITI 2015-2017 work plan (in accordance with Requirement 1.5).
Ines Schjolberg Marques
Ines Schjolberg Marques is part of the Anglophone and Lusophone Africa team focussing on Eastern and Southern Africa, and supports wider policy work at the EITI International Secretariat.
EITI responsibilities: Africa and Middle East. Oversight for finance, human resources, communications, and the Global conferences.
Eddie Rich has been Deputy Head of the EITI since the International Secretariat was established in 2007.